Forecast for Q1'16 - levels for GBP/USD - page 6

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Sergey Golubev, 2016.03.17 13:14

GBP/USD Intra-Day Fundamentals: Bank of England Rate Decision and 41 pips price movement

2016-03-17 12:00 GMT | [GBP - Official Bank Rate]

if actual > forecast (or previous one) = good for currency (for GBP in our case)

[GBP - Official Bank Rate] = Interest rate at which the BOE lends to financial institutions overnight.

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"The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target and in a way that helps to sustain growth and employment.  At its meeting ending on 16 March 2016, the MPC voted unanimously to maintain Bank Rate at 0.5%.  The Committee also voted unanimously to maintain the stock of purchased assets financed by the issuance of central bank reserves at £375 billion."

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GBPUSD M5: 41 pips price movement by Bank of England Rate Decision news event :



 

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Market Condition Evaluation based on standard indicators in Metatrader 5

Sergey Golubev, 2016.03.17 16:39

Forecast for Tomorrow - levels for EUR/USD, GBP/USD, USD/JPY

EUR/USD: intra-day breakout. This pair is on bullish intra-day breakout for H4 timeframe: price broke key resistance levels on the way to uptrend and it was bounced from 1.1342 resistance level. Chinkou Span line is located to be above the price indicating the intra-day breakout to be continuing. If the price breaks 1.1342 resistance to above so the primary bullish trend will be re-started, otherwise - ranging bullish.


  • if the price breaks 1.1342 resistance on close bar so the primary bullish trend will be continuing with good breakout possibility and with 1.1376 level as the next bullish target;
  • if not so the price will be moved within the channel on the ranging bullish market condition.
Resistance
Support
1.1342
1.1241
1.1376
1.0821

GBP/USD: bullish breakout with 1.4481 resistance to be broken for the breakout to be continuing. The intra-day price (H4) for this pair is on very similar situation with EURUSD: intra-day breakout. The price was bounced from 1.4481 level on the way to uptrend. Absolute Strength indicator is estimating the bullish trend, and Chinkou Span line is indicating the breakout to be continuing in the near future.


  • if the price breaks 1.4481 resistance so the bullish intra-day breakout will be continuing with 1.4577 level as the next bullish target;
  • if not so the price will be moved on the ranging bullish within the levels.
Resistance
Support
1.4481
1.4115
1.4577
N/A

USD/JPY: ranging bearish. Intra-day price (H4) is located to be below Ichimoku cloud for the primary bearish market condition: the price is started to be ranging within 110.66 support and 112.22 resistance levels. Absolute Strength indicator is estimating for the bearish trend to be continuing, and Chinkou Span line is indicating the ranging bearish condition in the near future.


  • if the price breaks 110.66 support level so the primary bearish market condition will be continuing without ranging up to the new 'bottom' to be forming;
  • if not so the price will be moved on the ranging bearish condition within the levels.
Resistance
Support
112.22110.97
113.81110.66

 

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Sergey Golubev, 2016.03.22 08:38

Trading News Events: U.K. Consumer Price Index (based on the article)

What’s Expected:



Why Is This Event Important:

The BoE looks poised to retain its current policy ahead of the U.K. Referendum in June as the Monetary Policy Committee (MPC) remains unanimous in keeping the benchmark interest rate at the record-low, but signs of stronger price growth may encourage Governor Mark Carney to adopt a more hawkish tone over the coming months as the central bank sees a risk of overshooting the 2% inflation-target over the policy horizon.

Nevertheless, waning confidence paired with fears surrounding the U.K. Referendum may drag on inflation, and signs of easing price growth may produce near-term headwinds for the sterling as market participants push out bets for a BoE rate-hike.

How To Trade This Event Risk
Bullish GBP Trade: Headline & Core Inflation Meet/Beat Market Forecast

  • Need red, five-minute candle following the print to consider a short GBP/USD trade.
  • If market reaction favors selling sterling, short GBP/USD with two separate position.
  • Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward.
  • Move stop to entry on remaining position once initial target is hit, set reasonable limit.
Bearish GBP Trade: U.K. CPI Report Disappoints
  • Need green, five-minute candle to favor a long GBP/USD trade.
  • Implement same setup as the bearish British Pound trade, just in reverse.
Potential Price Targets For The Release
GBPUSD Daily


  • GBP/USD may largely preserve the downward trend carried over from 2015 as the BoE lags behind its U.S. counterpart, but the bearish divergence in the Relative Strength Index (RSI) may highlight an inverse head-and-shoulders formation in the exchange rate as Governor Carney continues to argue that the next move will be to normalize monetary policy.
  • Interim Resistance: 1.4910 (61.8% retracement) to 1.4930 (38.2% expansion)
  • Interim Support: 1.3870 (78.6% expansion) and 1.4000 pivot

 

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Sergey Golubev, 2016.03.22 10:57

GBP/USD Intra-Day Fundamentals: U.K. Consumer Price Index and 42 pips price movement

2016-03-22 09:30 GMT | [GBP - CPI]

if actual > forecast (or previous one) = good for currency (for GBP in our case)

[GBP - CPI] = Change in the price of goods and services purchased by consumers.

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  • "The Consumer Prices Index (CPI) rose by 0.3% in the year to February 2016, unchanged from January 2016.
  • This maintains the position seen over the last few months of a rate which is a little above zero.
  • The contributions to change in the CPI rate from the detailed categories were relatively small compared with most months.
  • The largest downward contribution came from the transport sector, from price changes for items such as road passenger transport, second-hand cars and bicycles.
  • Rising food prices, particularly for vegetables, offset this.
  • CPIH (not a National Statistic) grew by 0.6% in the year to February 2016, unchanged from January 2016."

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GBPUSD M5: 42 pips price movement by U.K. Consumer Price Index news event :



 

Quick Technical Overview - Sell GBP: intra-day price is breaking 1.42 support for the bearish reversal

GBP/USD: possible intra-day bearish reversal. H4 price broke Ichimoku cloud and it was stopped by 1.4203 key bearish support level. if the price breaks this level to below so the bearish reversal will be started up to 1.4052 bearish target. Absolute Strength indicator is estimating the bearish condition to be started, and Chinkou Span line came to be very close to the price for the good possible breakdown in the near future for example.


There are the following news events which will be affected on GBP/USD price movement for the week:

  • 2016-03-23 14:00 GMT | [USD - New Home Sales]
  • 2016-03-24 09:30 GMT | [GBP - Retail Sales]
  • 2016-03-24 12:30 GMT | [USD - Core Durable Goods Orders]


Resistance
Support
1.44301.4203
1.4514
1.4052
 

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Sergey Golubev, 2016.03.23 07:23

Technical Targets for GBP/USD by United Overseas Bank (based on the article)

GBP/USD: ranging bearish within 1.40/1.45 area

Daily price is located below 100 period SMA and 200 period SMA for the primary bearish market condition with the secondary ranging within 1.4052 support level and 1.4535 resistance level.

  • "The break below the 1.4350 stop-loss resulted in a sharp drop to a low of 1.4191. The up-move that started from the low of 1.4053 last week has topped out at 1.4514, much sooner than expected and short of our 1.4570 target. Despite the sharp drop, we are not convinced that the current weakness is a resumption of the bearish trend in GBP.
  • The current movement is viewed as part of a broad sideway consolidation range and further choppy can be expected in the next couple of weeks, likely holding between 1.4050 and 1.4400 (bias is for a probe lower towards 1.4050)."

RSI indicator is estimating the secondary ranging to be continuing.  

  • If the price will break 1.4535 resistance level on close bar so the local uptrend as the bear market rally will be started with the secondary ranging and 1.5160 level as the nexr bullish reversal target.
  • If price will break 1.4052 support on close bar so the bearish trend will be continuing.
  • If not so the price will be ranging within the levels.
Resistance
Support
1.45351.4052
1.51601.3835


  • Recommendation to go short: watch the price to break 1.4052 support level for possible sell trade
  • Recommendation to go long: watch the price to break 1.4535 resistance level for possible buy trade
  • Trading Summary: ranging bearish

 

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Sergey Golubev, 2016.03.24 07:43

Trading the News: U.K. Retail Sales (based on the article)

The U.K. Retail Sales report may produce headwinds for the British Pound and drag on GBP/USD as signs of a slowing recovery provides the Bank of England (BoE) with greater scope to further delay its normalization cycle.

What’s Expected:


Why Is This Event Important:

Even though BoE argues that the next policy move will be to lift the benchmark interest rate off of the record-low, the Monetary Policy Committee (MPC) may preserve its current policy throughout 2016 in an effort to mitigate the downside risks surrounding the real economy.

Nevertheless, the expansion in private-sector lending paired with the ongoing improvement in labor-market dynamics may boost household spending, and a positive development may generate a near-term rebound in GBP/USD as it puts pressure on Governor Mark Carney and Co. to normalize monetary policy sooner rather than later.

How To Trade This Event Risk

Bearish GBP Trade: Retail Sales Slips 1.0% or Greater
  • Need red, five-minute candle following the GDP report to consider a short British Pound trade.
  • If market reaction favors bearish sterling trade, short GBP/USD with two separate position.
  • Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward.
  • Move stop to entry on remaining position once initial target is hit, set reasonable limit.
Bullish GBP Trade: U.K. Consumption Beats Market Expectations
  • Need green, five-minute candle to favor a long GBP/USD trade.
  • Implement same setup as the bearish British Pound trade, just in reverse.
Potential Price Targets For The Release

GBPUSD Daily


  • Longer-term outlook for GBP/USD remains tilted to the downside as the BoE continues to endorse a wait-and-see approach in 2016, and the pair may continue to carve a series of lower highs & lows over the near to medium-term should the Relative Strength Index (RSI) fail to retain the bullish formation carried over from earlier this year.
  • Interim Resistance: 1.4910 (61.8% retracement) to 1.4930 (38.2% expansion)
  • Interim Support: 1.3870 (78.6% expansion) and 1.4000 pivot

 

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Sergey Golubev, 2016.03.24 11:07

GBP/USD Intra-Day Fundamentals: U.K. Retail Sales and 31 pips range price movement

2016-03-24 09:30 GMT | [GBP - Retail Sales]

if actual > forecast (or previous one) = good for currency (for GBP in our case)

[GBP - Retail Sales] = Change in the total value of inflation-adjusted sales at the retail level.

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  • "Year-on-year estimates of the quantity bought in the retail industry showed growth for the 34th consecutive month in February 2016, increasing by 3.8% compared with February 2015.
  • The underlying pattern in the data, as suggested by the 3 month on 3 month movement in the quantity bought, showed growth for the 27th consecutive month, increasing by 0.8%.
  • Compared with January 2016, the quantity bought in the retail industry is estimated to have decreased by 0.4%."

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GBPUSD M5: 31 pips range price movement by U.K. Retail Sales news event :



 

Quick Technical Overview: Forecasts for GBP/USD

GBP/USD. Daily price is located below 100-day SMA/200-day SMA ranging area for the bearish market condition: the price is ranging within 1.4052 support level and Fibo resistance level at 1.4534. If the price breaks 1.4052 support level to below on close daily bar so the bearish trend will be continuing; if the price breaks Fibo resistance level at 1.4534 to above so the bear market rally will be started up to the bullish reversal level at 1.4667.


There are the following news events which will be affected on GBP/USD price movement for the week:

  • 2016-03-28 12:30 GMT | [USD - Core PCE Price Index]
  • 2016-03-29 14:00 GMT | [USD - CB Consumer Confidence]
  • 2016-03-29 15:30 GMT | [USD - Fed Chair Yellen Speaks]
  • 2016-03-30 12:15 GMT | [USD - DP Non-Farm Employment Change]
  • 2016-03-31 07:00 GMT | [GBP - BOE Gov Carney Speaks]
  • 2016-03-31 08:30 GMT | [GBP - Current Account]
  • 2016-04-01 08:30 GMT | [GBP - Manufacturing PMI]
  • 2016-04-01 12:30 GMT | [USD - Non-Farm Employment Change]
Resistance
Support
1.45341.4052
1.4667
1.3835

Short-term forecast: the price will be on ranging bearish within Fibo levels.

Medium-term forecast: the key resistance at 1.4052 will be broken to below.

Long-term forecast (by year-end): price will be moved inside 1.40/1.38 s/r channel.

 

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Sergey Golubev, 2016.03.29 16:05

GBP/USD Intra-Day Fundamentals: BoE Financial Policy Committee and 16 pips price movement

2016-03-29 11:00 GMT | [GBP - BoE Financial Policy Committee]

[GBP - BoE Financial Policy Committee] = policy changes taken and commentary about the economic conditions comments.

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"In an environment of low inflation and continued weakness in investment and productivity growth, prospects for global nominal growth are subdued.  This raises questions about resilience to future adverse shocks, particularly for EMEs where debt levels continue to rise and terms of trade have deteriorated.  In this environment, the re-acceleration of credit growth in China is concerning.  In some advanced economies, lower nominal interest rates associated with weak growth prospects are restraining profitability in banking systems that are still in post-crisis repair and pose challenges for some banking business models.  Globally, bank equity prices have fallen significantly and a material proportion of banks are now trading below book value."

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GBPUSD M5: 16 pips price movement by BoE Financial Policy Committee news event :



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